LZ77 Compression
From WADder Wiki
End User
LZ77 is often found in Banners and other files on the Wii. If the file is "filename.lz", which is LZ77 compressed, it is "headerless" LZ77 and as such does not have the "LZ77" header that is used to identify LZ77 compression in other types of LZ77 compressed files. You can use wiilz77.exe from WADder to extract LZ77 compressed files with the "LZ77" header, and for ones that do not have it, add it in with a hex editor and use wiilz77. wiilz77 is based on gbalzss by many authors.
Technical Info
See gbalzss for info on this. The compression is supported by gbalzss and c.exe, though the latter is illegal from the Nintendo SDK. Info on non-Nintendo LZ77 can be found at Wikipedia.
